Rupee slips as oil importers increase dollar purchases

The Indian rupid fell on Thursday as aggressive dollar purchases by oil importers by the end of the session, put under pressure on the local currency, even then persistent Greenback turnover by foreign banks helped to compensate some of the losses.

The Asian currency closed 0.24% lower on Thursday at 87.2700 per US dollar against the previous closure of 87,0650.

“There were some debt inflow that had masked the impact, but with that we saw the impact of dollar offers,” said a trader with a broker.

In the meantime, foreign banks on the offer side in the dollar/rupid pair for most of the session were again on Thursday, so that the pattern was exercised over the past two days – a movement that has surprised traders.

The continuing sale by foreign banks in combination with the proposed tax cuts of the Indian government and the conversations of US President Donald Trump with Russian and Ukrainian presidents helped to move the rupee higher than 87 for the first time this month.

However, the upcoming deadline of 27 August for the implementation of extra 25% US rates on Indian goods is expected to pose a new threat to the rupid. “The expectation is that the rupid will be on the weaker side until September,” says Dilip Parmar, currency analyst at HDFC Securities. Earlier this week, India’s accusations of India about the purchases of Russian oil during the Ukraine war damaged the rupee. Also being closely monitored, the American Federal Reserve chairman Jerome’s speech on the Jackson Hole Symposium on Friday, in which market participants will look for clues about interest rate in the largest economy in the world.

Asian currencies were mixed on Thursday, while the dollar index was flat at 98,238 from 1536 ist.